Below are the top designations for each category in the finance industry: Accountant, Financial Planner, Investment Analyst. Use this guide to help you evaluate finance professionals and how the credential can help your particular situation.
Certified Financial Planner (CFP): They provide complete advice in all areas of personal finances. From insurance and taxes to investments and estate plans, they have extensive knowledge to help you better manage your finances.
- Education: CFP practitioners develop theoretical and practical financial planning knowledge by completing a comprehensive course of study at a college or university offering a financial planning curriculum registered with the Certified Financial Planner Board of Standards.
- Examination: CFP practitioners must pass a comprehensive two-day, 10-hour CFP Certification Examination that tests their ability to apply their financial planning knowledge in an integrated format. Based on regularly updated research of what planners do, the CFP Board's exam covers the general principles of financial planning, insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning and estate planning.
- Experience: CFP practitioners must have a minimum of three years' experience working in the financial planning process prior to earning the CFP mark. As a result, CFP practitioners have demonstrated a working knowledge of counseling skills in addition to their financial planning knowledge.
- Ethics: As a final step to certification, CFP practitioners must pass an ethics review and agree to abide by the CFP Board's Financial Planning Practice Standards and a strict code of professional conduct, known as the CFP Board's Code of Ethics and Professional Responsibility. The Code of Ethics states that CFP practitioners are to act with integrity, offering professional services that are objective and based on client needs.
- Re-certification: It is also necessary for every CFP certificant, once certified, to complete a re-certification every two years. Those seeking to maintain their certification must attain a minimum of 30 hours of continuing education in order to stay current with developments in the financial planning profession and to better serve their clients. Two of these hours must be spent studying the CFP Board's Code of Ethics and Professional Responsibility or Financial Planning Practice Standards.
Certified Public Accountant (CPA): A CPA license is the accounting profession’s highest standard of competence, a symbol of achievement and assurance of quality.More than just income tax preparers, CPAs help business owners value their company, audit financial statements, devise strategies to lower taxes and provide general advice personal finances. The requirements, which are set by each state board of accountancy, include:
- Degree: Most states require 150 semester hours of instruction – which is 30 hours beyond the typical four-year bachelor’s degree.
- Exam: The CPA exam consists of four separate exams, which are taken one at a time. Candidates may take the exams in any order; but once you pass the first exam, you must pass the other three within 18 months. Exam topics are Audit and Attestation; Financial Accounting and Reporting; Regulation; and Business Environment.
- Experience: Most states still require 2 years of on the job audit and or tax experience.
- Continuing Education: Again, each state is different but most require at least 120 hours every 3 years with a minimum of 20 each year.
Chartered Financial Analyst (CFA): This credential is known for its rigorous focus on current investment knowledge, analytical skill, and ethical standards. Most jobs held by CFAs are portfolio managers for mutual funds or investment advisor firms.
To become a CFA a person needs to:
- Hold a bachelor's degree from an accredited institution or have equivalent education or work experience.
- Pass three CFA exam each of which is 6 hours long.
- Have 48 months of acceptable professional work experience in investment decision making.
- Provide professional reference statements.
- Agree to adhere to and sign the Member's Agreement and the Professional Conduct Statement.
